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2017 Supreme(Del) 3964
IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT, C. HARI SHANKAR, JJ.
SUNIL KUMAR AND ORS. - Petitioners
versus
NORTH DELHI MUNICIPAL CORPORATION - Respondent
WP(C) 9984 OF 2017
Decided On : 10-11-2017
For the Appellant :Mr. Rakesh Tiku, Sr. Advocate with Mr. Jai Sahai Endlaw and Mr. Sandeep Kumar, Advocates.
For the Respondent:Ms. Mini Pushkarna, Standing Counsel NDMC with Ms. Vasundhara Nayyar and Ms. Anushruti, Advocates and Mr. Ashwini Mathur, JLO, RP Cell, NDMC.
The public agency is not invariably bound to accept the highest bid if there are valid reasons for cancellation or not accepting the highest bidder.
Headnote:
Cancellation - Bids - NDMC Act, 2011, Section 7(a) and 7(c) - The court discussed the cancellation of bids for the allotment of parking sites by the North Delhi Municipal Corporation. The key legal provisions discussed were Section 7(a) and 7(c) of the NDMC Act, 2011, which provide for the cancellation of tenders without assigning any reason and the authority of the competent officer to accept or cancel bids. The court found that the rationale for the cancellation of the bids was persuasive and legitimate, and upheld the decision of the Corporation.
Fact of the Case:
The petitioners challenged the cancellation of bids for the allotment of parking sites by the North Delhi Municipal Corporation. The bids were cancelled due to poor response and marginal price increase in the bids.
Finding of the Court:
The court found that the cancellation of the entire tender was not arbitrary and upheld the decision of the Corporation.
Issues: Cancellation of bids, rationale for exclusion of tenders, expectation of the highest bidder to be awarded the contract.
Ratio Decidendi: The public agency is not invariably bound to accept the highest bid if there are valid reasons for cancellation or not accepting the highest bidder. The rationale for cancellation must be persuasive and legitimate.
Final Decision: The writ petition was dismissed.
S. RAVINDRA BHAT, J.
CM No.40720/2017 (for exemption)
Exemption is allowed subject to all just exceptions.
WP(C) 9984/2017 & CM No.40719/2017 (for interim relief)
1. The petitioners are aggrieved by cancellation of the bids issued on 24.08.2017 for allotment of 59 parking sites by North Delhi Municipal Corporation. The rejection of 32 bidders (out of 38) was the subject matter of an earlier writ petition being (Shobit Sharma vs. North Delhi Municipal Corporation) (WP(C) 9421/2017), decided on 27.10.2017 (hereinafter referred to as ‘Shobit Sharma’).
2. During the course of hearing, in Shobit Sharma, the Court had recorded the submission of the Corporation that the entire NIT was cancelled on 24.08.2017, which would lead to fresh tender for the 59 parking sites.
3. Mr. Rakesh Tiku, learned senior counsel for the petitioners urges that the cancellation of the bids, given that they were scrutinized and the present petitioners found to be H-1, is unreasonable and arbitrary. It is also urged, as a matter of record, that this Court was satisfied in Shobit Sharma (supra) that the reasons had to be communicated to the other 31 bidders, whose tenders were not accepted. Learned senior counsel contended that if, as a matter of fact, the reasons for not accepting such bids are a matter of record, there is no rationale for the subsequent cancellation, at least, under these circumstances, since the petitioners were adjudged to be H-1 and, therefore, had every reasonable expectation of the award of the contract. Learned senior counsel for the petitioners relied upon a judgment in the case of State of Punjab and Ors. vs. Bandeep Singh & Ors.: (2016) 1 SCC 724, to say that such cancellation can also be the subject matter of this writ petition and, if found arbitrary, be interfered with.
4. The NDMC was represented on advance notice. Learned counsel has produced the relevant file containing the reasons for cancellation of the entire tender. The relevant noting first took into account the fact that only 7 bidders were found eligible and had participated in the auction held on 18.10.2017. After listing the said 59 parking sites and the relative amounts offered by H-1 tenderer, the NDMC noticed the following:-
(i) though the 59 parking sites were included in the auction, only one single bid was received in respect of as many as 21 sites;
(ii) no bid was received in respect of 27 sites;
(iii) there was only a margin increase in the bids vis-a-vis MRP of 32 sites to the tune of 1.07 lakhs.
(iv) For the sites where two or three bidders had participated (i.e. 12 sites), the difference between the total bids vis-a-vis MRP was Rs.60,000/-.
5. Further facts are as follows:-
“The e-auction of NIT No. ADC/RP Cell/NDMC/2017/D-642 dt:24/08/2017 for allotment of 59 parking sites North DMC was held on 18.10.2017. Only 7 bidders participated in said e-auction (out of 38) as the screening committee constituted to securitize the documents, recommended 7 bidders as per tender conditions who bided for only 32 sites (out of 59). Out of 32 bidded sites 21 sites were bided by single bidder and 8 sites bidded by only two bidders and 3 sites bidded by 3 bidders for each site. The details of Parking sites with MRP (in Rs.), H-1 amount, number of bidders participating and name of the H-1 bidder are mentioned in the table at page No.25/N and 26/N.
It is clear from the above said table, the difference between MRP and H-I amount of the bids are marginal/insignificant. Whereas, the previous tenders e-auctions held on 13/10/2016, 01/12/2016 and 18/01/2017, (details shown in the table at page No.26/N), the difference between MRP and H-I bidding amounts were considerable and huge. It is also fact that there has been very poor response in the present tender that out of 32 bidders, 21 sites were bidded by single bidders and 8 sites bidded by two bidders and 3 sites bidded by 3 bidders for each site. It is also relevant to mention here that if the present parking sites are allotted for
